🚨Important news in the UK sustainability reporting landscape.🚨
The UK Government has announced updates to the Sustainability Disclosure Requirements (SDR).
Key components of the UK Governments plans:
IFRS Sustainability Disclosure Standards
It aims to make UK-endorsed ISSB standards available in Q1 2025 – this will be known as the UK Sustainability Reporting Standards (SRS).
The Financial Conduct Authority (FCA) will be able to use the UK SRS to introduce requirements for UK-listed companies to report sustainability-related information.
The Government is to agree disclosure requirements for companies outside of the FCA’s scope in Q2 2025.
Transition Plans
Given the overlap between IFRS S2 and the TPT Disclosure Framework, the FCA plans to consult on strengthening its expectations for transition plan disclosures with reference to the TPT Disclosure Framework.
The UK Government will soon consult on how the UK’s largest companies can most effectively disclose their transition plans.
SDR and Investment Labels
No key changes as the following remain in place:
The SDR and investment labels regime, with the anti-greenwashing rule coming into force 31st May 2024.
The FCA consultation on extending the SDR and labelling regime to portfolio managers which remains open until 14 June 2024.
The Intention to consult in Q3 2024 on broadening the scope of SDR to include funds under the Overseas Funds Regime.
UK Green Taxonomy
Consultation is planned in due course on the UK Green Taxonomy including the overarching framework, use cases and specific activity level criteria which defines green activities.
After the Taxonomy has been finalised a testing period will be introduced for at least two reporting years before mandating any disclosures. Whether disclosure is to be mandated is yet to be decided.
Nature-related Disclosures
No commitment was made on nature-related disclosures but the UK Government acknowledged the work undertaken by the Taskforce on Nature-related Financial Disclosures (TNFD) and encouraged companies to engage with the TNFD UK National Consultation Group recommendations.
Support is provided for the ISSB’s recent announcement to commence research projects on nature risk disclosure and opportunities as part of an enhanced baseline of investor-focused sustainability disclosure.
It encourages the ISSB to consider the holistic nature risk management approach developed by the TNFD.
The SDR Implementation Update: Sustainability Disclosure Requirements: Implementation Update 2024 - GOV.UK (www.gov.uk)
Cover image: Unsplash
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